Index Ventures has raised a fresh fund with €350 million (£283 million) to back ambitious European businesses at an early stage of development.
Ben Holmes, a partner at the firm tells GrowthBusiness, ‘Two-thirds of the money is likely to go to European companies. There has been not so positive press about Europe, but this [fundraising] is a reflection of our investors’ confidence that fantastic companies can be built from a European platform.’
The fund is part of €1 billion raised over the past 12 months, which includes €500 million for a Growth fund and €150 million for Life Sciences.
The Ventures fund will focus mainly on deals of between €5 million and €15 million, though it will also make seed stage investments of ‘a few hundred thousand euros’, Holmes adds.
It will concentrate on the same territories as other Index funds: Berlin, London, New York City, San Francisco, Stockholm and Tel Aviv.
Holmes explains, ‘The core focus is on companies that happen to come out of Europe that are going after global opportunities – companies like Skype in telecoms, Playfish in gaming, MySQL as an open-source database.
‘We will also selectively invest in US companies where we know the entrepreneur well and they are looking for a European partner.’
Sectors of particular index to Index at present include e-commerce, cloud computing, social media and financial services.
‘In financial services, we’re looking at every vertical and horizontal, from payment processing to business lending, and seeking out disruptive ways to displace what the banks are doing, or replace what the banks have stopped doing,’ says Holmes, referencing current portfolio company Funding Circle as an example.
He adds that there are ‘a lot of deals in the pipe right now’.
‘We’re confident and ambitious about what Europe can achieve, and we see venture investing as one of the levers that can help dig Europe out of the state it’s in.
‘Our portfolio contains many substantial companies with revenues in the billions, employing thousands of people – and these are, almost by definition, all new jobs. We believe Europe can produce winners,’ Holmes declares.
Index Ventures’ successes include Last.fm, Betfair and Lovefilm. Among its current portfolio companies are fast food ordering service Just-Eat, secondary ticketing marketplace Viagogo and fashion e-tailer notonthehighstreet.com.
